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Soilbuild Reit proposes to acquire S$100m Bukit Batok property

Tuesday, June 14, 2016 - 20:48

SOILBUILD Business Space Real Estate Investment Trust, or Soilbuild Reit, said its manager is proposing to buy an industrial property at 2 Bukit Batok Street 23 for S$100.5 million.

At the same time, Soilbuild plans to enter into a master lease arrangement with the seller of the property, SB Westview Investment, which is a subsidiary of sponsor Soilbuild Group Holdings.

The lease is for seven years. SB Westview will pay rent of S$8 million in the first year with a step-up of 2 per cent a year.

Soilbuild Reit said that the property is strategically located with high specifications. The Reit plans to fund the purchase with debt, equity or perpetual securities depending on market conditions.

Should the purchase be fully funded by debt, Soilbuild Reit's leverage will increase from 36 per cent to 40.8 per cent. The valuation of Soilbuild Reit's portfolio is estimated to increase to S$1.29 billion from S$1.19 billion at end-2015.

Soilbuild Group's executive chairman Lim Chap Huat is a 24.9 per cent-controlling unitholder of Soilbuild Reit and holds an indirect 100 per cent stake in SB Westview. Thus the proposed acquisition and master lease agreement constitute interested party transactions that will be voted on by unitholders in an extraordinary general meeting in August. A circular will be issued in July.

Soilbuild Reit last traded at S$0.69.

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